To optimize this approach, we have worked closely with jurisdictions through our jurisdictional working group, which includes representatives from China, the, Japan, the U.K and the U.S., recently joined by Chile and Singapore. Harrison: Can you share a bit about how these newly launched standards fit into the web of sustainability regulations that are coming into effect over the next few years, particularly in Europe?įaber: ISSB standards are designed to create a global baseline of sustainability-related financial language, on top of which jurisdictions might add specific building blocks. We established a with GRI last year to align our work programs and standard-setting activities, and that way can provide a comprehensive and seamless suite of reporting standards. Companies looking to provide a holistic suite of information for investors as well as other parties can combine the use of ISSB standards and GRI standards in a multi-stakeholders reporting approach, in an efficient way. The ISSB standards are focused on the information needs of investors and other providers of capital, while seeks to meet the broader information needs of other stakeholders. We had over 1,400 comment letters in response to our consultation on the proposed standards. Companies applying ISSB standards will be fully compliant with the TCFD recommendations. Among others, we have built our standards using other previously established work, including the industry-specific SASB standards (which are now a part of the International Financial Reporting Standards Foundation, or IFRS Foundation), as well as the TCFD recommendations, so companies that have already adopted these will be in a great place to apply IFRS S1 and IFRS S2. Our standards have been developed by consolidating voluntary initiatives. This is a core reason why the ISSB was created. Harrison: For organizations newer in their sustainability journey and that are getting a sense of the existing reporting landscape - what do you tell them when it comes to using other reporting regimes (GRI, TCFD, etc.) in the market? How do those fit or not fit into the global baseline the ISSB is developing?įaber: I would tell them that companies have been wrestling with a complex reporting landscape for some time. We have also produced an effects analysis, which examines the costs and benefits our standards will have on companies and investors, thus providing a detailed analysis of the anticipated outcomes. Those looking for a faster read can turn to the project summary published on our website. What is the most proximate next step that investors and issuers should get smarter on as it regards this launch?Įmmanuel Faber: Alongside the ISSB standards themselves - which I would encourage anyone with an interest to read and which include application guidance - we have published supporting materials to provide context to the standards, summarize their key points and illustrate their application. Grant Harrison: The International Sustainability Standards Board launched its first two standards today. This interview was edited for clarity and length.Įmmanuel Faber, chair of the International Sustainability Standards Board I spoke with ISSB Chair Emmanuel Faber, former CEO of Danone, about the launch of the first finalized standards, why they matter and why Scope 3 is still a work in progress. So what do preparers, investors and other market participants need to know about this next phase of evolution in sustainability disclosure? Rather than adding new ingredients to the alphabet soup of extant sustainability disclosure standards, the ISSB standards build on the work of (among others) the Climate Disclosure Standards Board (CDSB), the Task Force on Climate-related Financial Disclosures (TCFD), the Value Reporting Foundation’s Integrated Reporting Framework and industry-based guidance from the Sustainability Accounting Standards Board (SASB). The standards are intended to be the foundation for a comprehensive global baseline of sustainability disclosures specifically focused on the needs of investors and the financial markets - something investors have long desired. The International Sustainability Standards Board (ISSB), launched at COP26 in Glasgow, has published its first two finalized standards: S1 General Requirements for Disclosure of Sustainability-related Financial Information and S2 Climate-related Disclosures. Has the day that investors longing for harmonized ESG reporting standards long wished for finally arrived?
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